Delhi High Court
Amco Batteries Ltd vs Commissioner Of Value Added Tax on 4 March, 2014
Author: S.Ravindra Bhat
$~36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 4th March, 2014
+ ST.APPL. 35/2013
AMCO BATTERIES LTD ..... Petitioner
Through Mr Virag Tiwari, Mr Rajesh Jain and
Mr K J Bhat, Advs.
versus
COMMISSIONER OF VALUE ADDED TAX ..... Respondent
Through Ms Chandni Mehta, Adv. for Ms
Avnish Ahlawat, Adv.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
MR. JUSTICE R.V. EASWAR
S. RAVINDRA BHAT, J. (OPEN COURT)
The following substantial question of law was made out at the
stage of admission:
"Whether the Objection Hearing Authority could have
directed imposition of interest under Section 74(7) of the
Delhi Value Added Tax Act, 2004?"
2. The petitioner's grievance is regarding the objection to the order of
the Commissioner under section 74(7) that even though its objection was
accepted substantially yet in the operative directions the Objection
Hearing Authority (hereinafter called as "OHA") under sections 74 of the
Delhi Value Added Tax Act, 2004 (hereinafter called the "Act") was
accepted. Yet in the operative portion, the OHA as the Commissioner is
called in such cases has directed the assessing authority to determine not
only the tax due after verification but also the interest component.
3. The assessee relies upon several judgments and contends that the
power of the OHA under section 74(7) is extremely limited and
circumscribed and certainly does not extend to the jurisdiction to direct
recovery of interest. It is contended that even though section 42 is
indicative of the legislative intent, the interest has to be mandatorily paid.
There is a great degree of subjectivity in the given facts of particular case.
The counsel relies upon section 32(2) to state that precise liability of any
assessee or dealer would crystallise having regard to the period in issue
and the fact as to whether its contentions are accepted by the assessing
officer in the circumstances. By way of an illustration it is stated that
where default or development adjustment is made the assessing authority
partly accepted the contentions of the dealer; the law may be restricted in
the event the period for which interest may be levied could be entirely
different. In other words, the interest is not a blanket and omnibus one
admitting only one shade of submissions. In the impugned order the
OHA accepted the submissions of the dealer, with respect to the tax
period in question i.e. 2007-08 for various periods. The appellant's
argument was that in the light of the decision of this Court in M/s
Kirloskar Electric Company Ltd. vs. CST(1991) 83 STC 485 (Delhi), the
assessee had to be granted the benefit of concessional duty upon proper
verification of the records as to the expenses or furnishing of the
concerned forms. The OHA pertinently held as follows :
"6. I have gone through the documents submitted by the
dealer in support of the objection against default
assessments u/s 9(2) of CST Act and have also heard the
arguments of the counsel, whereupon, i am of the considered
view that since the dealer is in possession of above said
statutory forms; it would be just and fair to consider the said
form for the purpose of concessional rate of tax in the light
of judgment of Hon‟ble High Court of Delhi in the case of
M/s Kirloskar Electric Co. Ltd., Vs. CST wherein it has been
held that the State was entitled only to the tax which was
legitimately due to it and statutory forms can be accepted
even at the appellate stage if the dealer could not procure
the same at the time of assessment.
7. Keeping in view the facts stated above, the objection
relating to default assessments u/s 9 of CST Act for the tax
period stated above is accepted and VATO concerned is
directed to consider the above - said C/F Forms for the
purpose of allowing concessional rate of tax subject to
verification of the said form and the transactions related
thereto in the light of books of accounts and documents like
GRs, bank statement, sale invoices etc. The order may be
passed by the Assessing Authority in accordance with the
provisions of the CST Act and the Rules framed there under.
The VATO concerned is further directed to ascertain that, if
refund for the period in question has been released, then the
amount of tax due, not duly supported by C forms is to be
recovered along with interest. Also, interest on the entire
amount is to be charged from the due date of tax for all the
„C/F‟ forms not deposited, in view of the judgment of
Hon‟ble High Court in the matter of CTT Central
Switchgear."
4. The dealer was aggrieved by this order and sought modification
which was declined on 30.3.2013. The Tribunal's view is that the
proceedings before OHA appear to be wide since the power of the
Commissioner is an appellate power. The Tribunal also indicated that the
power of the OHA to insist upon payment of interest is by way of
incidental or supplementary one to enable enforcement of other
provisions of the Act. In this case as is evident from the extracted
portions of the OHA's order, the merits of the dealer's contentions with
regard to the assessing authority overlooking that certain concessional
rate of tax stood accepted. Yet the OHA while noticing that a question of
reduction is likely to arise directed the OHA to determine the interest.
Whilst two views may be possible given the mandate of section 42(2)
which requires dealers to pay interest in addition to the "amount
assessed", yet there can be a degree of relativity having regard to the
circumstances in each case. In the present instance the dealer's argument
with respect to its entitlement to claim some concessional rate in view of
the documentation furnished by it was substantially accepted. In these
circumstances, the direction to recover interest on the non-submission due
to non-availability of forms in fact amounts to pre-judging the issue.
Having regard to these facts the latter directions of the Tribunal are
hereby set aside.
The appeal is partly allowed in the above terms.
(S. RAVINDRA BHAT)
JUDGE
(R.V. EASWAR)
JUDGE
MARCH 4, 2014
vld
